SECP has mandate to probe against cos involved in market manipulation: IHC

ISLAMABAD: Islamabad High Court (IHC) has reaffirmed the Securities and Exchange Commission of Pakistan’s (SECP) regulatory mandate regarding investigations against companies involved in suspected market manipulation.

The SECP has appreciated the judgment of the Islamabad High Court, which has reaffirmed the SECP’s regulatory mandate regarding investigations under the Securities Act, 2015.

The writ petition challenged the SECP’s investigation proceedings initiated under Section 139 of the Securities Act, 2015, in a matter involving suspected market manipulation. The case pertained to trading in the shares of a listed company, where the share price was inflated by approximately 236% between December 13, 2013, and October 04, 2016.

Despite being served lawful notices requiring their appearance before the investigation team, the petitioners chose not to comply and instead sought relief through constitutional jurisdiction. However, the IHC dismissed the petition, ruling that the SECP had acted within its legislative authority, and that such investigations were essential to maintaining market discipline and investor confidence.

In its judgment, the Court observed that the SECP’s notices were lawful, detailed, and did not constitute adverse or final orders but merely sought clarifications from the recipients.

The Court noted that intervention at the investigation stage would unjustly impede the regulator’s ability to perform its statutory functions.

The SECP’s powers under Sections 137 and 139 are procedural in nature, can be applied retrospectively, and do not violate Article 12 of the constitution. Additionally, the constitutional protection against self-incrimination under Article 13 (1) (b) does not extend to regulatory investigations, as requiring information does not amount to compelling testimony.

Copyright Business Recorder, 2025